How to Remove Late Payments From Your Credit Report

Every lender and financial institution assess your credit report first before providing your any type of loan or line of credit. This credit report summarises your credit history for the past 36 months. It is your ability to take loans and repay them on time. You must have a good credit score and an accurate report if you want quick approval for any type of loan, credit card, etc.

If your credit report has a late payment record it can have a detrimental effect on your score and hinder your ability to get credit. Late payments from your credit report will bring down the score and most lenders will deny your loan applications. Some lenders may offer you a loan but you will have to pay a high interest rate if your report has late payment records.

Your credit score can go down by up to 100 points if you do not make due payment for 30 days or more. It is vital to pay your EMIs on time and in this blog we will learn about how to remove late payments from your credit report.

How is Your Credit Health Affected by Late Payments?

The payment history is always considered the most when calculating your credit score. Even if you make one late payment, your credit score can take a significant hit. There are several factors that influence the effect of late payments and the longer your payment is past due, your score will be affected more.

Most creditors and loan providers won’t notify credit agencies about late payments for up to a month. However, after 30 days, late overdue payments will appear on your report which will decrease your credit score. The longer you delay your payment, the more your credit score will take a hit. Those who have an excellent credit score will take a bigger hit on their score as someone with a bad credit history already has negative behaviour in his credit report.

How Long Does Late Payments Stay on a Credit Report?

Late payments have a long-lasting effect on your credit report but they aren’t permanent. All late payments are taken of credit reports after a period of seven years. However, with passing time, the influence or effect of late payments go down.

Debts under collection and unpaid debts also are taken off credit reports after a 7-year period. Still, you should not leave any unpaid debts in the hope that they are wiped off because collection agencies may take legal action or other steps for recovering your unpaid debt amounts.

What Can You Do to Remove Late Payments from a Credit Report?

If you want to keep your best credit report, then it is recommended to make timely repayments. However, some times due to an emergency or bad financial situation, you may not be able to make payments on time. If there is a late payment marked on your credit report, here is what you can do to remove it –

Ask Your Lender for a Goodwill Adjustment

You may ask the creditor or lender for a goodwill adjustment in case your repayment history is good and you have defaulted on payment for the first time. You can tell the lender about any unfortunate situation like loss of job, medical emergency, etc. and ask them to remove your late payment record.

If your payment has been good the lender may consider removing the record. However, it is no guarantee that the lender considers your goodwill letter and can both agree or decline your request.

Set up Auto-Debit Payments

Sometimes, people forget about their EMI and miss payment past the due date. You can turn auto-debit payments so that the payment will be automatically debited from your account on the due date. You will not have to worry about missing your repayment.

Also, if you have a late payment record, you can request that lender to remove it as you are activating the auto-debit system now. It will give the lender assurance about you not missing your next due payments.

Make Partial Payments

If your lender does not accept your goodwill adjustment, you can make part-payments towards the total overdue balance and request for removal of the late payment record. Again, there is no guarantee that your lender accepts this but it is possible when you make payments towards your dues. This will give them assurance that you are slowly but surely repaying the loan.

Pay Off Your Complete Overdue Amount

Try to pay off your complete overdue balance if the funds are available and then request your lender to remove the negative record. Once you pay the complete amount overdue by you, there is nothing more left to pay and the lender may accept your request because he has received all due money.

The above methods can help you remove a late payment record off your credit report but it is recommended to make timely payments and not default on your payments. If you have the best credit report with a high score, you are more likely to be approved for secured and collateral-free loans at affordable rates.

Conclusion

Your credit history and score are important if you want to apply for loans or credit cards with high chances of approval. If you have taken a loan, try to repay on time because a late payment record can severely hurt your credit report. Also, a negative, late payment record past 30 days can reduce your credit score by 100 points and will stay on your report for 7 years.

If you have defaulted on your repayments because of a financial emergency or some other event, try to repay your dues as soon as possible and request your lender to remove the late payment record. The above discussed methods will help you a lot in doing so.

Also, do check your credit report regularly and if you find any inaccurate or wrong records, file a credit dispute and talk to your lender for making the correction.